The financialisation of food and farming

Geoffrey Lawrence, Sarah Ruth Sippel and David Burch

Chapter 15 in Handbook on the Globalisation of Agriculture, 2015, pp 309-327 from Edward Elgar Publishing

Abstract: Following the global financial crisis of 2008 and the subsequent identification of so-called ‘toxic assets’ – particularly the multifaceted financial products associated with the real estate sector – finance capital has been seeking new asset classes through which to channel funds. While the food and farming sectors have traditionally been risky investments, factors such as rising global population levels, increasing scarcity of land and water resources, and the growing demand for food from the burgeoning middle classes in countries such as China, India and Indonesia, have made food industry and farmland investment increasingly attractive. Much research has focused upon ‘land grabbing’ in the Global South. This is occurring as sovereign wealth funds from rich, but often land-poor, countries seek to guarantee a steady and long-term food supply for their citizens by investing abroad. It is leading to displacement of subsistence producers and often occurs in a manner that is unfair, underhanded and socially disruptive. Biofuel production is another land-based investment that is popular with finance sector investors. Along with these activities, finance is creating products that incorporate foods and fibres and is selling these as virtual assets traded on international markets. Such ‘derivatives’ provide opportunities for hedging and speculation on futures markets. In this chapter, financialisation is defined and its contours outlined. Details are provided of takeovers in food manufacturing and retail, commodity speculation, and global farmland purchase. A final section details the growing opposition that is occurring globally as food and farming are progressively ‘financialised’.

Keywords: Business and Management; Development Studies; Economics and Finance; Environment (search for similar items in EconPapers)
Date: 2015
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